Myths about new home construction and home builders

INCORRECT FACTS AND MYTHS ABOUT NEW HOME CONSTRUCTION

Our goal as a Professional Real Estate Inspection Firm is to educate our clients, future clients and the general population about new home construction local building processes. As a Professional Real Estate Inspector, I see the both real great Houston builders and some not so great. The new home construction industry is just like other industries in business today, they exist to make a profit. Quality is a top priority until it interferes with the builder’s profit margins. As I tell many of my new home inspection clients, based on the price of homes today, you really should get what you pay for.

With the recent decline in home market sales, rising cost of home production and the recent increase in foreclosed homes in the greater Houston area, Houston builders have found it more difficult to sale homes in the current buyer’s market. Homes that previously sold quickly with little overhead are now standing vacant on the market for longer periods of time. The longer the newly constructed homes are on the market, the more cost that is incurred by the builders. Houston builders have resorted to cheaper labor and lest expensive building practices. What does this mean to you the new construction home buyer, it means the corners cut by the builder as pasted onto you the buyer through lower quality construction. Read below to discover some interesting incorrect facts and myths about new home construction in the Houston area:
I can get a better price by dealing with the builder direct.
Sounds reasonable. After all, with one less finger in the pie, there's more money to go around and why shouldn't you get some of it? Well, like many things that seem reasonable, once you dig a little deeper the situation changes.
Builders, we're talking multi-unit builders not one-off spec builders, are very concerned about the price for which they sell their homes. Selling for less makes the original buyers very unhappy and that often comes back to haunt the builder, even in future projects. Builders will do almost anything to keep the prices up. That's where your opportunity is.
Builders must maintain the feeling of fairness and value. Fairness keeps everyone happy. Feeling that someone else got a better deal makes people very unhappy. Neighbors talk! Keeping value is important. If appraisers sense softness in price, they will appraise at the lowest common denominator. This hurts the loan market and the word gets out and potential buyers will insist on buying for less.
So where's your share? It's not in the price. There are ways to get a good deal from a builder. It requires negotiating and knowing what's important to the builder. That's where having an experienced agent will benefit you.
You can't go wrong with a nationally named builder!

News shows like "48 Hours", "60 Minutes" and "Dateline" have segments every year about nationally known builders involved in class action lawsuits over cutting corners (sometimes literally) and other poor building practices. Hiring a well known builder is not a guarantee against anything! You must research the builder in the exact neighborhood you are going to build. Go to the other home owners and ask them how well a job the builder did. If they were smart and hired an independent inspection during construction ask to see the report! Always be on your guard! Do your research! Don't think it can't happen to you!
It's a new home! I don't need a home inspection.
Another reasonable supposition. After all, the builder has to provide a ten-year warranty, right? Sure. Of course, if the builder goes out of business, that warranty isn't worth much.
But that's not the point. A new home is a very complex conglomeration of myriad pieces. There are hundreds of thousands of parts that go into a house. It is beyond expectation that all those parts will be put together properly. An axiom in real estate is that a new home takes 12-18 months to shake down.
I'm having a new home built so I won't run into problems with it down the road.

Just because your buying or building a new home does not mean you won't have problems with it. I hear from people all the time with 2, 3 and 4 year old homes that have had or are having major problems with their new homes. With the scores and scores of unskilled laborers and the work load of the site superintendents, many things can and do go wrong on the work site. We can manufacture many items on an assembly line with unskilled workers putting the nuts and bolts in hole A and slot B and tightening. That process has not worked and never will work with a quality site built home. It takes attention to detail and true craftsmanship to build a home that will last for the ages. Sadly, there are very few craftsmen left! I see homes built back in the '70's and '80s that are better built homes than some of the ones being built today at 3 to 5 times the money!
O.K., fine, you say. So what is a home inspection going to do for me? After all, that's another $250-$300 out of my pocket.
A builder had framed a house, put in the plumbing and had the floors laid, tile, in the master bathroom. One of the workers for the tiling sub-contractor had cleaned out his grout bucket in the toilet. Get the picture? The grout had gone deep into the pipes and solidified. The first time the new owner used the toilet, it overflowed. Plumber couldn't fix it. The builder took several weeks to come around. Then, they had to pull up the tiling, remove the toilet, grind through the concrete slab, this is Texas—no basements, houses are built on concrete slabs, replace the pipes, pour new concrete, fit the toilet back then re-tile the bathroom floor.
Do you think the new owner was somewhat put out about this? A simple home inspection would have revealed this problem and the builder would have fixed it tout suite. Why? Because the buyer wouldn't have paid the builder the rest of the money until it was fixed.
That's the point of a home inspection. It provides you, the buyer, with leverage over the builder. This leverage is crucial to not only having problems fixed in a timely matter, but it is also a new negotiating point.
Before you move into your new home, the builder will ask you to do a walk-through. This is the time to have a professional inspector with you. The builder will ask you to sign-off on the walk-through. Wouldn't it be nice to have everything fixed before you move in? Having construction workers tramping through your new home while you are getting settled in is not conducive to pleasant living.
Below are some of the common misunderstandings past to the new home buyer through word of mouth or straight from the builders themselves:


My builder told me that the home has already been inspected and approved by the city.

The municipal inspectors are so overwhelmed that it would be impossible for them to conduct a thorough inspection of each home currently under construction. On average, each municipal inspector in the greater Houston area may conduct dozens of partial and completed phased inspections per day. As a professional independent home inspector, I know for a fact that it is not possible to do more then 2 thorough inspections in one day. Many inspectors will not do more then 2 inspections in one day. If the home is over 5,000 square feet or an older pier and beam type home, we will only do one per day. In all fairness, the municipal inspectors are not inspecting the entire home all at once as we are. However, it is still not possible to be thorough with such a heavy work load.

Once a home has passed a city inspector’s phased inspection, doesn't that mean that everything is proper and safe?

I have found numerous homes that have been inspected by city or municipal inspectors that had several undocumented or overlooked items. See my website at: http:www.atexinspects to view our newly constructed home inspection in a suburb of Houston. Notice in the report, Opps…there is not insulation in this home which has been on the market for almost a year. Go figure, right?

Should I have the home inspected during construction?

Most definitely, many times problems that would otherwise be difficult to identify and repair can easily be corrected during construction.

When is the best time to contact a Professional Real Estate Inspector?

It is never too late to contact a home inspector, however the sooner the better for you the new home buyer. You will want to start communication with your inspector as soon as you sign a contract with your builder. It is important to let your builder know right away that you intent to hire a third party, independent residential home inspector. Inform them that you want your inspector to work in conjunction with the builder during the building process. This will normally let the home builder know upfront that you are very serious about the construction of your new home. Most often, the builder’s site foreman will pay special attention to your home’s construction. No one likes to have flaws or defects pointed out in their own backyard.

My home was built in the city limits so it had city inspectors inspecting it as it was built.

That's one of the biggest myths out there. The city inspectors in Houston and the surrounding areas are snowed under by all the new construction going up. The last I heard, they had to do around 15 to 22 inspections in a day to keep out of hot water back at the city hall. Now with workloads like that, about the maximum amount of time a city inspector can be in a home is 15 to 20 minutes. I've seen more than a few homes get "green tagged" without there ever having been a city inspector in the house. You had better believe the superintendents and sub-contractors know this also!

My builder showed me where they hired a company to inspect the home while it was being built and that I shouldn't go out and hire an independent inspector myself.

If a builder builds a superior home day in and day out, they're never afraid of you hiring an independent inspector. I hear it all the time from clients that their builder did everything but cut the phone line to prevent them from calling an inspector on their own! The "builders" inspector is a company they hire to do code inspections on their new homes. These inspectors do many of the builder’s homes every day. They also are there only a short while before they head off to another home. Are you beginning to see why some builders and superintendents don't want independent inspectors looking at their homes? The simple fact is that a builder that builds a good home doesn't fear an independent inspection of their homes and will actually encourage you to hire an inspector. It's like a badge of honor to them if their homes come through an independent inspection in fine shape.

My builder said I was being too picky about wanting some items fixed in my home. Am I being too picky?

Just how picky does your money allow you to be? While it is true no home is perfect, you wouldn't go out and pay full price for a new car that had dings and scratches in the paint with an engine that knocked and the radiator located where the gas tank should be would you? It's your home. They are supposed to be hiring professional craftsmen to do the work (but we know they aren't don't we). True craftsmen will make very few mistakes while building your home. Un-skilled day laborers will make many obvious mistakes that anyone can find. You can bet that many of the defects and flaws that your seeing don't exist in the building company's owners house or any of the managements homes. So why should they be allowed in yours? Whether your spending $70,000 or $700,000 to have a home built, you deserve the very best workmanship on your home. It's your money, demand quality!

My builder said I didn't need an independent home inspection because I had a 1 year warranty and that if anything was going to go wrong, it would happen inside a year.

I have never and will never inspect a newly constructed home that I didn't find something wrong where the builder needed to fix or repair multiple items. They always miss something. There are just two many components on a house to make sure they are all okay! Now can you imagine what a pain and inconvenience it would be to have a work crew to come back into your house to fix minor defects and flaws within a year? Now imagine what would happen if you had a major repair to be made! It's as simple as this, most builders know your not going to have an inspection on your new home before the warranty runs out, so, they'll be off the hook unless something major goes wrong, and that is what they bet against! It's a lot easier on you to have major and minor items fixed, repaired or replaced during construction than after you have lived there a year.

Now I could go on and on with example after example, but I hope your finally seeing how this industry works. If the builder has to pull the drywall sub-contractors off of a job down the road to come back to your house, he's losing money. Now the other house is going to get behind and he runs the risk of that house not closing on time. If he can talk you out of fixing all that drywall damage, then he is money ahead. I hope your beginning to realize how this industry operates. You need to insure some amount of quality control in your home and your not likely to get it from someone who stands to lose money by having extra work performed!

I've heard just about every excuse there is for not hiring a Professional Real Estate Inspector. The fact remains that if you will hire an experienced and qualified home inspector before you even pour your foundation, you will go a long way in making sure your dream home doesn't end up a nightmare! Look at it this way, for less than the price of 2 top of the line Moen faucets, you can have a professional to watch out for your interest and make sure things are done right during the construction on your home.

If just a portion of the people that are involved in class action lawsuits would have hired a professional home inspector before they had closed, they probably would have been warned before hand, enabling them to shop for a better home. How many of these people do you think will hire a home inspector next time? (Sadly, most people after going through something like this refuse to ever think about building again, and who could blame them?)

Remember this also, if you live in a rural area, you don't even have the slim amount of protection that someone inside the city limits does! There are no local government inspectors inspecting your home! In Texas, you do not have to be licensed to be a Home Builder. There is an industry joke that goes something like this "All you have to do in Texas to be a Builder is to have a cowboy hat, a ladder and a pickup truck". You don't know how many times I've seen that joke become a reality!

Some of the more common problems we find with new homes are:

Gas appliances not plumbed correctly

Damaged or missing shingles, flashing or ridge vents, roof decking not cut for ridge vents, missing H-clips on decking,

Improper gas lines, poor caulk & seal

Insufficient soil grading, missing brick veneer weep holes

Rafters notched, missing or damaged

Improper electrical panel installation, improper breaker sizing for electrical appliances (thus voiding your warranty on the appliance), insufficient main electrical feed

A/C's not installed or functioning properly

Water heaters improperly installed, improper flue clearance

These are only a tiny fraction of problems I routinely find on new homes.

We perform a three phased new home construction inspection.

I'm a Professional Real Estate Inspector licensed by the State of Texas; I have been in this industry for many years and have seen many good people taken advantage of by builders. Sometimes intentional sometimes not, but either way they ended up spending more money than they really had to. Hiring a Professional Real Estate Inspector to watch over the construction of your new home puts control of the building process in your hands, not the builders!
The pre-slab, pre-sheet rock and final phased or completed inspection.
It seems that you are asking me to go overboard with all of these inspections. Isn't the builder responsible to build a quality home?

We are only looking out for your best interest. It would be impossible for me to describe all the potential hassles and problems related to skipping the inspection process. We view ourselves as consumer advocates. We are there to protect your best interest. If you were expecting to purchase a home with problems, you would not be going through all the time consuming hard work and aggravation of the construction process in the first place. As a consumer advocate, you can be guaranteed that we will do everything we can to see that you end up with a quality home.

No. The builder is not responsible to build you a quality home. The builder is responsible to meet minimal standards at best. In the years that we have been inspecting, we have found that most builders seem to be more concerned with quantity of turnover vs. quality of construction. It is not difficult to build a home that will be somewhat free of problems during the time of the builder warrantee. It is an entirely different process to build a home that will be in good condition, assuming proper maintenance, 25 years after construction. Of course we realize that you may not be in that home 25 years down the road. However, you will probably be in the home after the warrantee has expired. When you go to resale in the future, chances are good that the purchaser will hire an independent inspector. It would be a shame for you to be put in the position of having to pay for builder mistakes at that time.

Other added benefits of the inspection process include:

1) Saving money, time and aggravation - The builder should arrange for repairs if problems are found after you move into the home. Every time you have to stay home from work to meet with a repair person, it will cost you money one way or the other. Not only is that, but the aggravation factor of dealing with these issues not something that you are going to want to go through.

2) Peace of mind - Assuming that things are found to be in good order or the builder repairs items found during the inspection, you will have peace of mind and confidence that you have purchased the home you deserve.

3) Education - The inspection process can be very educational. You will likely walk away from the inspection with knowledge of your home that you would not have otherwise received. We go out of our way to provide as much information as possible about not only the construction of your home but tips on how to maintain it.

Please contact us to assist with your new home construction phased inspection or new home purchase inspection.

Sincerely,
Robert Welch
281-216-1171
Robert@atexinspects.com
http:www.atexinspects.com